Bill offers tax incentives to ADM, Univar, Office Depot

Illinois lawmakers on Monday introduced a bill that would grant special incentives to three of the at least half a dozen companies seeking to keep taxes their employees would have paid to the state.

Incentives for the three companies -- Office Depot, agricultural giant Archer Daniels Midland and chemical distributor Univar Inc. -- are valued at more than $88 million.

The incentives were attached to a bill that would impose a 5 percent fee upon companies that provide direct broadcast satellite service, such as Direct TV. Those companies can pass the fee to consumers.

Rep. Michael Zalewski, D-Riverside, the sponsor of the bill, said the fee would generate $75 million per year that would be routed to an education fund that would, in essence, offset the cost of the incentives.

Separate bills were considered by lawmakers during the fall session but stalled after the House adjourned. The bill filed on Monday combines those separate bills into one.

Under the bill, Office Depot would create 200 jobs in the state and retain 2,050. Boca Raton, Fla.-based Office Depot and Naperville-based OfficeMax merged last month. The combined company, called Office Depot, is also seeking incentives from Florida.

ADM seeks incentives to keep its global headquarters in Illinois. Univar is seeking incentives because it's considering moving its headquarters to the state.

The reason the companies are pressing for the breaks is that there are years in which they have little or no state tax obligation and can't take advantage of the state's corporate income tax credit program. Thus, the companies are asking to use the credit against withheld employee income tax liability.

Some lawmakers have criticized the special breaks for companies. At a House Revenue and Finance Committee hearing in October, House Majority Leader Barbara Flynn Currie called ADM’s request “blackmail.”

"It essentially is blackmailing the state. It essentially is saying, if you don't jump to, if you don't go do this for us, we might think about going somewhere else," said Currie, D-Chicago.

Zalewski said he expects the conversation over incentives to continue on Tuesday, when lawmakers are scheduled to return to Springfield for a one-day session to consider an agreement struck by legislative leaders that aims to fix the state's massive government worker pension.

“It is important to remember that these companies wish to do more business in Illinois,” Zalewski said.